UK Manufacturing Industry Spurs Job Creation in February: Markit

Markit Group’s gauge of UK manufacturing activity increased from 56.7 to 56.9. A median estimate of economists polled by Reuters called for a narrow drop of 0.2 percentage points. A reading above 50 is a general sign of expansion in manufacturing output.

Increased production and new business continued to drive the manufacturing industry’s resurgence last month, Markit data showed. The uptick in business activity resulted in the fastest pace of job creation since May 2011, a positive sign for the nation’s labour force recovery. UK unemployment rose 0.1 percentage point to 7.2 percent in the three months through December, although jobless claims eased by more than 27,000 in January, official data from the Office for National Statistics showed last month.

“The survey suggests we should expect another quarter of robust economic growth in the opening quarter of the year,” wrote Markit senior economist Rob Dobson. “The Manufacturing PMI ticked higher in February to provide welcome reassurance that the sector has weathered the storms and flooding in parts of the country during the month. Growth of production and new orders lost only a little momentum and are still rising at above trend rates.”

The February results support the Bank of England’s recent appraisal of the UK economy. The BOE last month upgraded its annual outlook on the UK economy to 3.4 percent, citing favourable credit conditions, easing inflation and reduced uncertainty. Although joblessness unexpectedly rose in December, the unemployment rate is expected to reach its target threshold of 7 percent by the fall, according to the BOE.

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